Today, June 1, 2015, Canada’s Extractive Sector Transparency Measures Act (ESTMA) has come into force. The intent is to enhance accountability of payments made by the mining, oil and gas industries to all levels of government around the world.
All companies subject to the Act must now report payments – taxes, royalties, fees and production entitlements – of $100,000 or more to all levels of Canadian and foreign governments. The goal is to reduce corruption by enabling citizens around the world to hold their governments to account by allowing them to find out whether or not revenue provided by the extractive sector contributes to sustainable development and poverty reduction.
The new Act has come under fire because it will apply to Canadian aboriginals as well when they receive money from the mineral sector. However that will not happen until June 1, 2017. This concession was worked out at last year’s annual meeting of mining and energy ministers representing federal, provincial and territorial governments.
Overall, the mining industry applauds the Act.
“This legislation places Canada at the forefront of international efforts to eliminate corruption and promote transparency. The Mining Association of Canada and its members are proud to have played an active role in collaboration with the government of Canada and civil society in the promotion and design of this important legislation,” said MAC president and CEO Pierre Gratton.
Rod Thomas, president of the Prospectors and Developers Association of Canada, noted, “The Act is important to the mineral exploration and development sector as it will highlight the financial contributions and benefits that come from resource development. The legislation aims to provide companies with reporting standards to help demonstrate economic contributions made to local and national governments.”
We look forward to finding out how effective this Act will be.